The Los Angeles Times is reporting that a panel of city lawmakers approved a draft of the ordinance that would raise the Los Angeles-2minimum wage in Los Angeles to $15 per hour by 2020, moving the ordinance one step closer to passage.  There was a backlash this week against the labor unions that were pushing hard for the minimum wage increase, but at the last minute this week are seeking to have organized labor excluded from the increase.

In addition to having union members excluded from the minimum wage increase, there are still additional proposals that may also become law.  For example, late this week, a change was proposed to the ordinance to require Los Angeles employers to provide 12 paid days off each year.  It is unclear if the 12 paid days off would be for sick leave, or even vacation, but the council is considering this addition. Apparently this paid time off has been taken out of the proposed ordinance for now, but the council will send the proposal to the chief legislative analyst for review, and the ordinance could still be amended to add this requirement at a later date.  For now, the union exemption and the paid time off has been removed from the ordinance, and the city council is set to vote on the ordinance next week.

Many open questions still exist about the ordinance:

  • What rate must employees be paid who are traveling though or temporarily working in Los Angeles?  The LA Times reports that at today’s hearing, the city lawyers said that the law would apply to workers working at least two hours in a workweek in Los Angeles.
  • What about workers who split their time in Los Angeles and outside of Los Angeles?
  • What agency would enforce the city’s super-minimum wage?  Because it is a city law, the state labor commissioner would have no jurisdiction to enforce the law.  The city council believes that the enforcement unit would be comprised of five people, costing the city about $500,000 per year.  No doubt this enforcement arm would have to increase in order to have any potential way to enforce the new law.

The city is also considering the possibility of restricting restaurants from imposing mandatory service charges on customers.  Legally, when a restaurant imposes a service charge on a customer, that service charge becomes the property of the restaurant, unlike a tip left for the service staff.  The restaurants could prohibit tipping and simply charge the mandatory service charge.  By doing this, restaurants could then use the service charges as they wanted to, they could use this money to pay the higher minimum wage rates, distribute more of the service charge to the back of the house employees, or use it to off-set other costs.

It will be interesting to see what is passed next week by the city council, stay tuned.

If they have not already done so, employers need to start planning and putting a plan into action in order to ensure full July 1 2015-1compliance by the July 1, 2015 compliance deadline set by California’s Healthy Workplaces, Healthy Families Act.  As I’ve set forth before, many deadlines for the Healthy Workplace Healthy Family Act have already passed, and the primary compliance deadline of July 1 is looming.  Here are some considerations employers should begin resolving right now in order to ensure compliance by July 1.

 1.      Begin a dialogue with payroll company

Make a determination if your payroll company, or possibly some other vendor, will track the necessary accrual of paid sick time and the other data points needed to comply with the law.  Some payroll companies are charging to add this component to the payroll process.  Do not assume that the solution your payroll company is offering complies with the law, and employers need to manage this process very closely to ensure compliance.  Also, the law requires that the employer set out the amount of paid sick leave available on the employee’s pay date with the employee’s payment of wages.  This notice can be made on the employee’s pay stub or some other writing at the time the employee is paid, and a sample from the company’s payroll processing company should be reviewed prior to July 1, 2015 to ensure it meets the legal requirements.

 2.      Begin a dialogue with temporary staffing agents

If your company uses any outside staffing firms, there needs to be a discussion about compliance with the paid sick leave requirements.  It should be carefully spelled out in the contract with the staffing firm about who will be tracking the paid sick leave for the employees and meeting the other requirements of the law.  If the staffing firm is handling this issue, there should be an indemnity clause protecting the client as there could be joint employer liability for missteps in complying with the act.

 3.      Decide what data needs to be tracked and who will track it

There are surprisingly many dates and data points that need to be tracked under the new law.  For example, employees are not eligible to use any accrued sick leave until their 90th day of employment.  Therefore, employers will need to be able to track this deadline in order to ensure the employee qualifies for paid sick leave before receiving pay for the time off.  In addition, employers may cap employee’s use of paid sick leave to 24 hours or 3 days “in each year of employment.”  However, this “use cap” will need to be tracked according to each employee’s anniversary date with the company.  Employers may have multiple vendors who have access to the data necessary to track and calculate the eligibility of employees to use paid sick leave, and there needs to be one point of contact designated to ensure the information necessary is being tracked.

 4.      Provide notice to employees

Employers need to provide non-exempt employees already employed as of January 1, 2015, information about the paid sick leave law and the employer’s policy as soon as possible.  While the notice to employee published by the Labor Commissioner is only required for non-exempt employees, employers should consider communicating its paid sick leave policy and any revised policies to comply with the law (see below) to all employees given that the paid sick leave law covers all employees, exempt and non-exempt.

 5.      Review and decide if your other policies need to be revised to comply with the law.

Employers need to review other policies such as vacation, sick leave, kin care leave, and attendance policies to ensure they comply with the requirements of the new sick leave law.  For example, the act presumes that an employer retaliated against an employee “if an employer denies an employee the right to use accrued sick days, discharges, threatens to discharge, demotes, suspends, or in any manner discriminates against an employee” within 30 days of the employee taking leave or opposing an employment practice prohibited by the law.  With this strong presumption build into the law, employers need to review their attendance policies to ensure that the employees will not be adversely affected if they do take paid time off covered by the act.

Today’s Friday’s Five article is a bit different in that it focuses on the attorney –Abraham Lincoln client relationship.  Here are five recommendations to get the most out of your relationship with your lawyer:

1. Ask a lot of questions.

No question should be off limits with your lawyer. Ask questions about litigation issues, billing issues, what legal terms mean. Very few clients routinely deal with litigation and understand the legal process or legal terms. Your lawyer should be able to explain these issues in a manner you understand. If your lawyer is put off by your questions, it is probably time to look for another lawyer that is actually going to help you understand your options. This is especially true about bills from your lawyer: if he is put off by questions about a bill, it is time for a different lawyer.

2. Respond quickly to your lawyer’s requests.

It will save you time and money if you respond quickly to requests for information or documents from your lawyer. Your case is not the only case your lawyer is working on, and to the extent he has to wait a week or two for your response and then pick back up where he left off, it is inefficient. Furthermore, you do not want to pay your lawyer’s hourly rate for him to follow-up with you to receive information needed for the case. This will increase your legal bill, and forces your lawyer to spend time thinking about other issues than the case.

Your lawyer should understand that you have a business to run and that you are dealing with other pressing issues. It is important to communicate with your lawyer that you received the request, are busy, but will respond by a certain time or date.

With this said, the rule is mutual. If your lawyer is not timely responding to your requests, it is time to think about changing lawyers.

3. Work with your lawyer before the need arises.

You are engaging a lawyer only for serious issues facing your company, and the attorney you chose to work with should not be taken lightly. I do not think many clients spend the required time to find the right lawyer for them, and simply use the lawyer that someone in their network referred to them. I highly recommend that clients start using an attorney and develop a relationship with their attorneys before the legal need actually arises. This gives the client an opportunity to work with the lawyer and evaluate the relationship, without having the additional stress of pending litigation. Engage a lawyer you were referred to on simple matters, such as helping out on an employee handbook or policy revision. See if the lawyer responds quickly, bills efficiently, and treats you with respect.

4.  Don’t kill the messenger.

Litigation sucks and almost no one likes it (only litigation attorneys like litigation and they are a strange group of people). Every client needs to vent to their lawyer every now and then, and I think a good lawyer should help the client work through the stresses of litigation. However, remember that your lawyer is on your side, and don’t take the stresses of litigation out on the person (or people) trying to help resolve the situation.  Don’t take this to mean that you cannot question your lawyer’s strategy.  If there is something you do not agree with the case strategy or other legal issue, do not be afraid to voice your difference of opinion. Your lawyer needs to have your feedback to develop the best case possible.

5. Be adaptable.

Litigation is uncertain and fluid. If a lawyer could predict the outcomes of litigation, they would be very wealthy. Strategies change as the case develops. Just as running a business, have a plan, but be ready to disregard the plan and change strategies if needed. Understanding this and analyzing the different strategies with your lawyer throughout the course of litigation will result in the best outcome. Also be flexible on how you negotiate. Negotiation styles must change based on where the case is.

Photo: Juan Garcia

As the July 1 deadline for employees to begin accruing paid sick leave, employers are wrestling with some of the ambiguitiessick created by the law.  The legislation left many unanswered questions for employers to grapple with.  Some of the more common questions employers have had deal with how to calculate the accrual rate for part-time employees and employees working alternative work schedules (such as a 4 day 10 hour schedule), and how to calculate the amount owed to employees paid by piece rate or commissions when they utilize paid sick leave.  As set forth below, the Department of Industrial Relations (DIR) has attempted to explain some of these issues.

 Accrual Rate For Part-time employees

It is important to note that the law allows employers to limit the employee’s accrual of sick leave to 24 hours or three days.  Therefore, if an employee only works six hours per day, and are sick for three days, they have only used 18 hours of paid sick leave.  The DIR has taken the position in its FAQs that the three day limitation cannot “be used to prohibit a part-time employee from using at least 24 hours of accrued leave in a year.”  Therefore, part-time employees must be allowed at least 24 hours of accrued leave even if this is more than three days off of work, according to the DIR’s interpretation of the statute.

 Accrual Rate For Employees Working Under Alternative Work Schedules

If the employer has taken the proper steps to establish an alternative workweek schedule (such as having employees work four days at 10 hours per day), the employer needs to be aware of some potential issues in calculating the amount of leave available for these employees.  The DIR’s position appears to be that employees working a 4-10 schedule actually accrue, and can take, 30 hours of paid sick leave, not 24 hours.  The DIR states that the “minimum requirements of the statute are 3 days or 24 hours” and therefore the employee working a 4-10 schedule is entitled to 30 hours of paid sick leave.

 Calculating Amount Owed For Piece Rate, Commissioned Based Or Other Employees With Fluctuating Pay

In order to determine how much the employer must pay the employee during sick leave, the employer must calculate the employee’s regular rate of pay.  If the employee’s pay fluctuates, such as being paid commissions or by piece rate, the employee’s regular rate of pay is calculated by dividing their total compensation for the previous 90 days by the number of hours worked.  The DIR provides the following example:

If an employee is paid commission or piece rate, then divide total compensation for previous 90 calendar days by number of hours worked and pay this rate. Employee was paid a piece rate of $0.36 per square foot for 16,500 square feet during 400 hours of work in a 90 day period. He earned $5,940:

•His hourly rate for paid sick leave is $5,940 ÷ 400 hours = $14.85 per hour

Employee is paid on commissions only. In a 90 day period, she worked 480 hours and earned $9,000:

•Her hourly rate for paid sick leave is $9000 ÷ 480 hours = $18.75 per hour

Photo: Alexandre Normand

While July 1, 2015 is the primary date making most headlines for the new sick leave requirement in California, and is when in fact employees begin to accrue and will be eligible to take paid sick leave, there are many other deadlines employers should keep in mind:

1.      January 1, 2015:

Required poster “Healthy Workplaces/Healthy Families Act of 2014 – Paid Sick Leave” must be displayed.

Employers must start using revised Notice to Employee for all new non-exempt employees hired.

If an employer takes any adverse employment action against an employee within 30 days of an employee: (1) filing a complaint with the Labor Commissioner or in court alleging violations of the law; (2) cooperating with an investigation or prosecution of an alleged violation of the law; or (3) opposing a policy, practice, or act that is prohibited under the law.  Even though the accrual of the paid sick leave does not begin until July 1, 2015, this protection of employees and the creation of a rebuttable presumption is effective January 1, 2015.

2.      April 2, 2015:

The 90 day period for calculating employees with fluctuating wages begins.  If an employee’s pay fluctuates (e.g., if they are paid commissions or on a piece rate basis) the employer must divide the employee’s total compensation for the previous 90 days by the number of hours worked to determine the hourly rate that must be paid for the employee on sick leave.  Therefore, since employees begin accruing paid sick leave as of July 1, 2015, employers should be able to track the amount of pay and hours worked 90 days prior to July 1, 2015 and on a rolling basis going forward.

3.      July 1, 2015:

Employees have the right to accrue and take sick leave as set forth under the law.

4.      First pay period after July 1, 2015:

Employers must provide employees with a written notice that sets forth the amount of paid sick leave available on the employee’s wage statement or in a separate document that is provided to the employee on the employee’s pay date with the employee’s payment of wages.  The employer must continue to report this information to the employees each pay period going forward.

5.      Written notice to employees of new or changed paid sick leave policy – Seven days after implementation of policy or by July 8:

The revised Notice to Employee form (available to employers for download at DLSE’s website) must be used for non-exempt employees hired after January 1, 2015.  For employees hired prior to January 1, 2015, the employer is required to provide a revised Notice to Employee or otherwise inform each employee of the information regarding paid sick leave within 7 days of the change, using any of the alternative methods specified in Labor Code section 2810.5(b).

Based on last week’s post about the lawsuit filed against LinkedIn alleging that it violated the federal Fair Credit Reporting Act (FCRA), I thought it would be good to point out a few issues the arise when employers conduct background checks.  This article is not comprehensive, and this area of the law is very detailed, but the article is to remind employers to use caution when implementing these policies, as the exposure for violations could be huge.

1.      Treat everyone equally.

If an employer makes the decision to obtain background reports for applicants or employees, the practice of obtaining the reports needs to be uniformly applied.  Simply by complying with the federal and state requirements for background reports and credit checks does not shield an employer from discrimination claims or other claims that the practice used by the employer is illegal.

2.      California employers can only conduct credit checks (which are different from background checks) for certain types of employees.

Since 2012, California employers can only perform credit checks on employees who meet very specific categories.

 3.      If using a third-party to perform the background check, federal and state law must be complied with. 

Generally speaking, three applicable laws apply to California employers who perform background checks: the federal Fair Credit Reporting Act (FCRA), California Investigative Consumer Reporting Agencies Act (ICRAA), and the California Consumer Credit Reporting Agencies Act (CCRAA).  Just as the three names of the statutes indicate, the laws are complex and are very detailed.  For example, the FCRA defines a “consumer report” as “any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for…employment purposes….”  Alternatively, California’s ICRAA uses the term “investigative consumer report”, and this pertains to generally the same items as the FCRA but not credit reports.  California’s CCRAA applies to credit reports, and defines the term “consumer credit report” to refer to credit reports and credit worthiness of an employee.  As one can easily see, the interaction of these three laws becomes very complex, and is not an area that most employers feel comfortable wading into without experienced legal counsel.

The laws generally require employers to:

  1. Obtain written authorization from the employee to conduct the background check
  2. Provide notice about background checks
  3. If taking an adverse employment action based on the information obtained through the background check, additional notices must be provided to the employees.

For example, before the employer takes an adverse employment action, they must provide the employee with a notice that includes a copy of the consumer report being relied upon in the decision.  The employer must also provide a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act”.

After the adverse employment action has been taken, the employer must provide certain information to the employee, such as:

  • The employment decision was taken because of the information in the report
  • The name, address, and phone number of the company that compiled the report
  • The company that compiled the report did not make the hiring decision, and
  • That the employee has the right to dispute the accuracy or completeness of the report, and to get an additional free report from the reporting company within 60 days.

As explained above, California employers can only perform credit checks for a very limited set of positions, and cannot perform a credit check on every employee.  In addition, the CCRAA requires additional disclosures to the employee if a credit check is performed.  See Cal. Civ. Code section 1785.20.5.

4.      Even if conducting a background check in-house, if an employer searches public records, these records must be disclosed to the employee within seven days.

Generally, if the employer conducts the background checks itself, the FCRA, ICRAA and CCRAA do not apply to the process.  One exception to this rule is that the ICRAA requires that if the employer searches “public records” the employer must produce a copy of the public record to the employee within seven days of receiving the information (this applies to records received either in written or oral form).  “Public records” are defined as “records documenting an arrest, indictment, conviction, civil judicial action, tax lien, or outstanding judgment.”

 

5.      Employers are required to provide certain notice to the third-party conducting the background check.

Employers using outside credit reporting agencies must provide a certification to the reporting agency that the employer obtained the permission from the applicant/employee to obtain a background report, complied with the FCRA, and does not discriminate against the applicant or employee or otherwise use the information for an illegal purpose.

This is a very brief and general introduction to the laws that apply to background checks in the employment setting.  Here are some resources for employers to learn more about their requirements under federal law:

The Fair Credit Reporting Act & social media: What businesses should know (FTC)

Background Checks: What Employers Need to Know (FTC)

The interaction between the federal FCRA, and California’s own requirements under the ICRAA and CCRAA adds another level of complexity to the analysis.  It is important for employers to review these laws closely to ensure compliance, and it is highly recommended to have experienced legal counsel review the practices.

Recently, the issue raised in Sweet v. LinkedIn is whether the Reference Searches functionality offered by LinkedIn is governed by the LinkedIn candyregulations set forth in the FCRA.  The Reference Search feature allows users who pay a fee to search for references that have worked with any other LinkedIn member.  The results list common employers and other LinkedIn members who are in the same network as the person running the search and the person who is the subject of the search.  When a LinkedIn user runs a Reference Search on a particular LinkedIn member, the Reference Search results provide the user with two different categories of information.

The Court granted LinkedIn’s motion to dismiss Plaintiffs’ complaint on a number of grounds.  The reasons are items that employers need to understand, and provide a good reminder about the FCRA requirements:

1.      Court held that the information being provided by LinkedIn is not a “consumer report.” 

The FCRA defines “a consumer report” as:

[A]ny written, oral or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for . . .

(B) employment purposes; or

(C) any other purpose authorized under section 1681b of this title.

The FCRA provides an exception to this definition, and states that a “consumer report” is not any “report containing information solely as to transactions or experiences between the consumer and the person making the report.”  Because LinkedIn publishes the employment histories of the consumer who are the subjects of the Reference Searches, and this information was provided by the LinkedIn users themselves (i.e., is information obtained by “transactions or experiences” with the consumers) the information provided by LinkedIn is not a consumer report.

2.      The Court held that LinkedIn is not a “consumer reporting agency.” 

A “consumer reporting agency” is defined as “any person which, for monetary fees . . . regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.”

However, the FCRA provides that “[a]n entity does not become a [consumer reporting agency] solely because it conveys, with the consumer’s consent, information about the consumer to a third party in order to provide a specific product or service that the consumer has requested.”  The Court held that this exemption applies to LinkedIn because, “Plaintiffs’ own allegations show that consumers provide LinkedIn with information about their employment histories so that LinkedIn can publish this information online.”

 3.      The Reference Search offered by LinkedIn does not bear on the “character, general reputation, mode of living” or other relevant characteristics to trigger application of the FCRA.

The only information provided by LinkedIn’s Reference Searches function is a list of people who once had a common employer with the subject of the search and who are also in the same network with the person conducting the search.  The Court held that this information is not the type of information that the FCRA is intended to protect.  Indeed, the Court stated that at its essence, the search function only provides a way for the searcher a way to “locate people who might be able to communicate on information about the consumer-subjects of these results, not that this results themselves convey bearing on information.”

 4.      The Court held that Plaintiffs failed to state a claim that the Reference Searches results are used or intended to be used as a factor in determining whether the subjects of the searches are eligible for employment. 

Again, the Court pointed out that the information provided by LinkedIn is only contact information about other people who may be able to provide reliable feedback about job candidates.  Since this LinkedIn does not market this report a source of reliable feedback about job candidates, the FCRA does not apply.

 5.      While the Court granted LinkedIn’s motion to dismiss, Plaintiffs still have an opportunity to cure any defects and file an amended complaint. 

So this probably is not the final analysis of this case.

The case is an important reminder to employers to be aware of the Federal and state laws that apply to background checks on applicants and employees.  Even though this case pertains to LinkedIn’s status under the FCRA, employers need to understand whether or not the background checks they are conducting trigger the FCRA, as the law places requirements on employers who use consumer reporting agencies.

For more information about the FCRA, the Federal Trade Commission and the EEOC published this joint report: Background Checks: What Employers Need to Know.

[Photo: Nan Palmero]

You may recall from your college business law class of the “American rule” regarding attorney’s fees: generally in the United States each side is responsible to their own attorney’s fees, and unlike other countries, the loser does not have to pay the other party’s attorney’s fees. Employers can basically ignore this general rule in employment litigation under California law. I debated about writing this article because once a lawsuit is filed, employers don’t have any control over what claims and damages the plaintiff will assert, so why would employers need to understand when they have exposure to a current or former employee’s attorney’s fees in litigation? However, employers need to understand the underlying liability of potential claims, the motivations behind those claims, and the major part of many employment law claims can be attorney’s fees. And as shown below, the California legislature has used the award of attorney’s fees to shift the risk in many actions against employers, and it is a concept that employers need to understand to address liability and litigation strategies. Here are five California employment related statutes that can expose employers to a plaintiff’s attorney’s fees:

1. Minimum wage/unpaid overtime claims. Labor Code section 1194, provides attorneys fees for plaintiffs who recover damages for minimum wage or overtime violations:

Notwithstanding any agreement to work for a lesser wage, any employee receiving less than the legal minimum wage or the legal overtime compensation applicable to the employee is entitled to recover in a civil action … reasonable attorney’s fees, and costs of suit.

2. Unsuccessful appeal of Labor Commissioner Claim. In order to discourage appeals from Labor Commissioner rulings, California Labor Code section 98.2(c) requires the court “shall” awards costs and reasonably attorney’s fees to the other party. This section permits the employee to obtain fees on an unsuccessful appeal by the employer, or to the employer who prevails on an unsuccessful appeal by employee. The catch for employers however, is that Labor Code section 98.2(c) provides that the employee is “successful” and therefore entitled to attorney’s fees “if the court awards an amount greater than zero.” Yes, even if the employee receives $1, they are successful in the appeal, and are entitled to their attorney’s fees. Therefore, employers have a huge disincentive in appealing Labor Commissioner rulings.

3. Expense reimbursement claims Labor Code section 2802 provides that employers must pay for and reimburse employees for “all necessary expenditures or losses incurred by the employee in direct consequence” of the employee’s job. Therefore, items like mileage reimbursement, even personal cell phone expenses, or other out-of-pocket expenditures employees make while performing their job must be reimbursed by the employer. Labor Code section 2802(c) provides that the employee is entitled to “attorney’s fees incurred by the employee enforcing the rights granted by this section.”

4. Private Attorney General Act (PAGA) claims Plaintiff’s counsel bringing a PAGA claim can seeks attorney’s fees under this statute as well. See Labor Code section 2699(g). Plaintiffs’ attorneys also claims fees under California Code of Civil Procedure section 1021.5, which permits them to recover fees if the case “resulted in the enforcement of an important right affecting the public interest” if certain requirements are satisfied.

5. California’s Fair Employment and Housing Act (FEHA) The Fair Employment and Housing Act (FEHA) prohibits harassment and discrimination in employment based on protected categories and/or retaliation for protesting illegal discrimination related to one of these categories. “In civil actions brought under [FEHA], the court, in its discretion, may award to the prevailing party . . . reasonable attorney’s fees and costs, including expert witness fees.” (Gov. Code, § 12965, subd. (b).) Under FEHA, the fee shifting provision goes both ways, to the plaintiff but also potentially the employer. Courts have discretion to award the defendant employer attorney’s fees and costs as the prevailing party in cases where plaintiff’s claim is deemed unreasonable, frivolous, meritless or vexatious. As a California court recently explained:

Despite its discretionary language, however, the statute applies only if the plaintiff’s lawsuit is deemed unreasonable, frivolous, meritless, or vexatious. . . . ‘ “[M]eritless” is to be understood as meaning groundless or without foundation, rather than simply that the plaintiff has ultimately lost his case . . . .’

Robert v. Stanford University, 224 Cal.App4th 67 (2014).

You’ve set up a successful company and begin hiring employees. To be a successful operator in California, a company’s management needs to be familiar with the critical legal concepts in order to successfully navigate California’s complex employment laws. You never wanted to go to law school, but time to hit the, ahem, books (or the Internet).  Here are a five fundamental legal concepts that every employer should understand:

1. At-will employment. Under California law, it is presumed that all employment is terminable at-will. California Labor Code section 2922 provides: “An employment, having no specified term, may be terminated at the will of either party on notice to the other.” The at-will doctrine means that the employment relationship can be terminated by either party at any time, with or without cause, and with or without advanced notice. There are some major exceptions to this rule, see item #3 below for example, but generally California law recognizes that employers and employees may, at any time, and for any legal reason, terminate the employment relationship.

2. Meal and rest break obligations. Employers cannot employ an employee for a work period of more than five hours per day without providing the employee with a meal period of at least thirty minutes. This break may be waived if the total work period per day of the employee is no more than six hours, with the mutual consent of both the employer and employee. A second meal period of at least thirty minutes is required if an employee works more than ten hours per day, except that if the total hours worked is no more than 12 hours. The second meal period may be waived by mutual consent of the employer and employee only if the first meal period was not waived. Rest periods are based on the total hours worked daily and a full ten minute consecutive break must authorized and permitted for each four hour work period, or major fraction thereof. I’vewritten about these obligations before, and the DLSE’s website provides many details regardingmeal periods and rest breaks.

3. Protected categories. Under the at-will doctrine employers may decide to terminate an employee based on any reason, just as long as it is not an illegal reason. An illegal reason would be one based upon an employee’s protective category, such as their race, gender, national origin, disability, age, or sexual orientation for example. California law even protects employees who are perceived to be in a protected category, associated with someone who is in a protective category, or even a sympathizer of someone in a protected category. In addition, the DLSE provides that the following activities are also protected:

The engaging in or exercising of a right that is protected by law. Some examples of “protected activity” under the Labor Code include: 1. Filing or threatening to file a claim or complaint with the Labor Commissioner. 2. Taking time off from work to serve on a jury or appear as a witness in court. 3. Disclosing or discussing your wages. 4. Using or attempting to use sick leave to attend to the illness of a child, parent, spouse, domestic partner, or child of the domestic partner of the employee. 5. Engaging in political activity of your choice. 6. For complaining about safety or health conditions or practices.

4. The difference between exempt and non-exempt. Employers need to understand which positions are legally entitled to overtime and other protections of the Labor Code, and the position that are “exempt” from these requirements. Here is a list of common exemptions under California law. It is important to note that employers and employees cannot simply make the determination and agree to be exempt on their own (the right to overtime cannot be waived, see non-waivable rights below). The employer has the burden of establishing that the employee meets all of the required elements of a particular exemption in order for the employee to be legally classified as exempt. 5. Understanding that certain Labor Code provisions cannot be waived by employees. Employees cannot waive their rights to certain protections offered by the California Labor Code. For example, employees cannot waive their rights to minimum wage, overtime, expense reimbursements for out of pocket expenses incurred for business purposes, right to participate in PAGA representative actions, and the right to receive non-disputed wages. You can read more about these rights here. So before a decision is made because the employee willingly agrees to the terms, or may even ask for certain employment terms, employers need to be sure that the employee can actually agree to those terms under the law. Photo courtesy of Janet Lindenmuth

Recently I published a list of common exemptions under California law. This list of exemptions did not delve into the details of each exemption in detail, so I will be returning to a few of the exemptions to add more explanation about each exempt classification. I’m currently reading Paul Graham’s Hackers and Painters, Big Ideas From the Computer Age. Therefore, this post turns to the computer professional exemption. In order for any computer professional to be properly classified as exempt from overtime pay under California law, employers should know the following five requirements:

1) The employee is primarily engaged in work that is intellectual or creative and that requires the exercise of discretion of independent judgment, and the employee is primarily engaged in duties that consist of one or more of the following: a. The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications. b. The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to, user or system design specifications. c. The documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.

2) The employee must perform the high-level work set forth in item #1 more than 50% of their work time. “Primarily engaged” means that more than 50% of the employee’s work time to be spent on those types of duties.

3) The employee is highly skilled and is proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering. A job title is not determinative of whether or not the position is exempt or not, and like every other exempt classification a determination must be made only on the types of duties the employee is supposed to be performing.

4) The employee is paid a wage that meets a certain minimum level that is adjusted each year. For 2015, the amount is set at $41.27 per hour or an annual salary of not less than $85,981.40 for full time employment, and not paid less than $7,165.12 per month. Therefore, in order to prove this exemption, an employer must maintain time and pay records to prove it has paid an employee at the level required by the law.

5) The exemption does not apply to certain types of computer workers. The computer professional exemption does not apply to individuals if any of the following apply:

  1. Trainees or entry-level employees. The employee is a trainee or employee in an entry-level position who is learning to become proficient in the theoretical and practical application of highly specialized information to computer systems analysis programming, and software engineering.
  2. Cannot work independently. The employee is in a computer-related occupation but has not attained the level of skill and expertise necessary to work independently and without close supervision.
  3. Work consists of repairing computer hardware. The employee is engaged in the operation of computers or in the manufacture, repair, or maintenance of computer hardware and related equipment.
  4. Work is not computer systems analysis or programming. The employee is an engineer, drafter, machinist, or other professional whose work is highly dependent upon or facilitated by the use of computers and computer software programs and who is skilled in computer-aided design software, including CAD/CAM, but who is not in a computer systems analysis or programming occupation.
  5. Work consists of developing user manuals. The employee is a writer engaged in writing material, including box labels, product descriptions, documentation, promotional material, setup and installation instructions, and other similar written information, either for print or for on screen media or who writes or provides content material intended to be read by customers, subscribers, or visitors to computer-related media such as the World Wide Web or CD-ROMs.
  6. Work consists of developing special effects. The employee is engaged in creating imagery for effects used in the motion picture, television, or theatrical industry.

Photo courtesy of Andrew Hart